Right.

That's a distinction that's not made in your platform.

It will be added, though.

So in the updated platform that change will be there.  So we're going to move on to Education Standards, Education Funding, and School Choice.  Michigan has always said that Education is a top priority, at least according to the information at my disposal.  We spend about 1/3 of our total revenue in this state on Education.  Is that enough, or is that too much?

It's not enough based on the way you've phrased the question, but I understand what you're saying.  It's not about how much the budget is, or how much of the budget that is taken.  It's, "how many students do we have, and are we educating them at the proper level for them to be competitive internationally?"

So the question isn't how much money's being taken in, it's how the money's being spent.

Exactly my point.  We have had a group of inexperienced legislators that do not have enough budget experience to deal with the multi-billion dollars that have to be dealt with, and how to properly appropriate in the most efficient manner, how to make the money work for us.  We're putting money out there, but we're putting it out there for the wrong reasons.

We're not putting money out into the hands of the school boards that we have elected, to let them allocate those funds in the best interest of their school districts.  We are legislating and dictating from Lansing how much money they're going to get and how they're going to spend it.  That's not our job; our job is to say, "These are the rules.  You were elected by the people just as we are.  Here is your budget, this is what we have available; now you have to make that work."

So give them the money and then make them accountable for how they spend it and the results that they display.

And we used to do that.  We used to audit our school districts on how they spent their money.

We're going to get back to that issue, too.  Our schools and other public entities are required by law to pay what is called the "Prevailing Wage" - or average wage in the construction industry nationwide - for their building projects.  What is your view of Michigan's Prevailing Wage Laws?  Does it affect the cost of Education?  If elected, would you support eliminating that Law?

No, I won't eliminate it.

Why not?

Because I don't think it's an issue.  In a free-market society it is not our job to legislate from Lansing and tell anyone what they can and cannot charge.  However, we have an existing law that allows communities to put a prevailing wage in to support their community economic level.  If that community wishes to support that prevailing wage, it's up to the city and county commissions that have control of that.

But if I'm not mistaken - and I could be - the Prevailing Wage Laws in this state are being issued, or were being issued, from Lansing.

How they got there, I can't debate that, because I don't know either.  I just know that we have this prevailing wage law and that it's by community standard.  Now I want to share this with you, because this is really important, and I have it written down because I knew this was going to come up.

Frequently heard from frightened conservatives is the claim that the price of freedom is blood.  But an even more out of place claim is that the price for maintaining a democracy is taxes.  In order to have a police force and prisons, let alone armies, you have to pay for them, and that means taxes.  However, in order to have a strong and active democracy, we need a literate and informed public.  These days that may require a college education.  But a more important point is that conservatives are so blinded by their only economic policy of lower taxes, that they don't realize that they have it exactly backwards.

So prevailing wage laws - again, as I understand them - effectively tie the hands of public entities when they're trying to bid out a project.  They have to pay a certain wage, as opposed to negotiating the best wage that they can get for the job.

I'm glad you bring that up, because I'm going to read the rest of this.  The lowest price is not always the best price.

Do you know why we have - and I'm going to say this very publicly - I support nuclear energy; always have.  But not in this nation; because we have it backwards; we have it wrong.  The reason that we have it wrong is that we bid nuclear reactors.

We've gone with the low-bid mentality without having the proper constraints in place to make sure to make sure that construction is done properly.  Because it's a critical mass that we're dealing with here, we're talking about human life.  Forty percent of the nuclear energy escaped from Chernobyl.  And the devastation's still being felt today there; it impacted the entire world.  The Canadians and the French, on the other hand, have it exactly right.  What they did was they said, "We're not going to bid this; this is too important.  We want bids, but we're only going to give it to one contractor.  And they're going to be the only ones that build them to the standard of design, and we're going to audit that process to make sure - before any monies are spent - each step of the way.

It's just like building a house.  You go to the bank, and the bank wants to know, "Do you own that property and do you have a construction plan?  I want to see proof."  And when you get the money, you do everything by the plan because it meets the bank's standard.

I'm a capitalist.  But there are certain things that we need to do in partnership with our government.

That doesn't exactly tie to the problem with the Prevailing Wage Law, because the Prevailing Wage Law ties the hands of the people who are doing the bidding.  We're not saying "low bid" is a good idea - twenty years in the military taught me that if anything, the low bid isn't always a bright idea.

But that's what we're talking about.  When we talk about the prevailing wage, are we talking about the prevailing wage in L.A., New York, Wyoming, or Grand Rapids?

Prevailing wage, to me, is the national average.  So whatever the average is nationwide - or maybe it's the average statewide - the point is that it's tied to a number that may or may not have anything to do with the state.

That number is tied to the community standard.  And if I'm whatever elected official is putting this contract out for bid, I'm going to get the prevailing wage for my community standard.

So the prevailing wage should reflect community standards, not any other.

Yes.  Why would I want to pay New York prices for something that I can do twice as cheap here?

So what about this then - and this was put out in the forum, too - there was a point, I think back in 1997, where a Mecosta County school district bid out a contract under prevailing wage, and there was a $283,000 cost overrun.  And after that contract was bid out and signed a federal judge ordered an injunction on prevailing wage.  And right after the injunction went into effect, a Berrien County school district saved 13% on a contract because they didn't have to follow the prevailing wage law.

Kelloggsville Middle School was built under prevailing wage.  It was built in less time and under budget and within standards . . . all of the standards.  Now this is a pretty big school; that was a major construction project.  If the Superintendent of that school district can do it, so can everybody else.  We have to give the control back to the school board to let them do what's in the best interest of their community.

What about this for a contracting or bidding mentality:  I understand that over in Europe, contracts are bid out, but it's not the low bid that gets it.  Rather, the guy who bids closest to average of all the bids that gets the contract.

As a businessman, that's what I do.  When we send out a request for bids, I always ask for three to start with.  And if I get back three totally different bids, then I send the request back out, except to a larger population.  And we always advocate, whenever we have the opportunity, to go with union bid, simply because we have better protections and guarantees in place.  We've never been involved, personally, on a contract issue where they can't come back and do the work a second time.

We always work to try to get to the middle, because that's going to be the fair cost.  That's realistic.  Again, cheap is not always good.

So again, prevailing wage should reflect community standard, not national standard, and perhaps not even a statewide standard.

Yes.

Okay, now we go to Detroit.  Every year when the legislature does their spending appropriations the City of Detroit receives far more education dollars and a special rules designation (they're the state's only "First Class School District") that's perceived as being designed as a big handout to Detroit's Democrat legislators.

You got that right.

If you were elected, would you fight to equalize education funding between Detroit and the rest of Michigan, especially school districts here in West Michigan?

In my platform, on education funding, I state that one of the first pieces of legislation - I have a plan; ten pieces of legislation in the first 90 days - one of those pieces will be on "equality in education funding."

Right, I remember that one.  In fact, I have a copy of it right here in front of me.

Do you know that Detroit schools are receiving $12,000 per pupil?  That's insane.  It's absolutely discriminatory, and guess who put that in place?  John Engler; that's Proposal A.  That's how he got Proposal A through Detroit, by telling them, "We're not going to reduce your funding.  You'll stay with the same formula."

And I met with him and his staff, as an economist, and I said, "This is a good program.  It's got some problems, because if the economy tanks, we're going to get hurt real bad.  You need a sunset clause in here.  Put a sunset clause in this for three to five years and bring it back for review.  Because not everything always works out the same; we need improvements here."

They said, "No; we're not going to sunset clause it.  It's going to go through this way."  And it did; and now we're seeing exactly what we proposed in 1993, when we talked about this plan before it went into effect in 1994, exactly what the fallout is when the economy faces submersion.  And we're submerged very deep right now.

So my statement is simply this:  All laws are good, but all laws need a sunset clause, because life changes and need to be able to have the flexibility to adapt.  But as humans we don't do that; we aren't good keepers of ourselves.  So we need sunset clauses to remind us:  Why was this done?  What worked, what didn't work, and how can we make it better?

So your thinking is that yes, absolutely, funding should be equalized between Detroit and the rest of the state.

I say it right in the platform.  One of the first things I will work for is equalization for every student, because if we discriminate against our own students, then we're discriminating against our state.  And discrimination is illegal.  And that goes back to the business statement that I mentioned earlier, too.  We're discriminating against businesses, against the small businessman; no wonder they're screaming.  The only problem is, our own Chambers of Commerce are relying on discrimination.

Now Detroit's a "first-class school district" because they're the only district in the state that has a certain number of students, which is accorded to them by law.  And had that number not been touched, Detroit Public Schools would have lost that first-class status this year because they would have dropped below 100,000 students.  The problem is that the State Senate voted to reduce that level - to, I think it was 65,000 students - still the only "first-class school district" in the state.  What're your thoughts on that?

I won't respond to the number, because I haven't researched that yet, but I will say this:  I support the removal of all protected status.  My position is that I'm going to work to equalize the entire education system.  Remove the State Superintendent from where he is and put him back in his own department as the Head of Michigan Education.  He won't report directly to the Governor; he'll report directly to the Legislature.  Because that's the system of checks and balances, which we don't have in this right now.

So you would then support anything that forces DPS to open their books to the public.

Every book should be opened; there's nothing that should be secretive here.  I support that anything that my tax dollars are being spent on being open to public review.  No question; no discussion.

Earlier this week the Detroit News suggested that the Detroit Public School system should be taken over by the State of Michigan, and cited as their justification that DPS is are $400 million in the hole.  What are your thoughts about a state take over of DPS?

I do not believe in state takeovers because we'll have incompetent people doing an incompetent job.  They're not educators.

So the state government should go hands off.

The state government should be doing the responsible thing.  The responsible method to correct the problem is that we have an elected board of education; we have to hold them accountable through proper auditing, through proper disclosure.  And it's up to the State Superintendent of Schools to enforce the rules.

So this feeds back into your earlier answer, then, in that Detroit Public Schools should lose their non-audit protection.  And they should be absolutely audited by the state, and whichever public officials - whoever they may be and however many there may be - should be held responsible according to the proper laws and criminal codes that may apply.

If criminal activity has taken place, just like the guy out in Caledonia . . . I don't care what you call this guy or what anybody wants to say, he was simply a petty thief to the tune of over $100,000.  He was a common criminal.  And he didn't do it in just Caledonia, he had a record of doing this.  And, whether they knew it or not, the guy broke the school rules.  Just like any student, he deserves to be thrown out on his ear and he deserves to have charges pressed against him because that's exactly what he would do if a student came to school with a gun, a knife, or injured another student.  Or if they stole from school, they'd be expelled.

So instead of a state takeover, you propose a state audit and punish the guilty wherever they may be found.

Yes.  These are criminals.  There is no cover for breaking the rules.  Be a man; stand up and take the heat.  I don't necessarily agree with George Bush on everything - on a lot of things - but you know what I do admire about the guy?  Whether he agrees, disagrees, or whatever, he's going to stand there and tell you what his position is.  And he tells his people, "Blame me.  I'll take the heat.  I'm going out; it doesn't matter."  The guy'll stand up and agree to disagree or whatever; but he takes the heat when he has to.

And shifting our education focus a bit, a proposed initiative that will not make the ballot this cycle provided from 4 years of age until the age of 18 years every resident child in Michigan would have funding to support education on a per pupil basis which would be controlled by the parent(s) or legal guardian(s) of each child respectively.  This seems to me to be the voucher program - the money follows the child - do you support or oppose this?

I oppose it.  If we continually take money away from our public education system, it's going to fail.  Our public schools will continue to fail because the money that should be there to make that school better, and to fund the operations, in not being invested in the infrastructure of greater learning.

But what if that money goes to support a school system, because it's a voucher and the money follows the child, what if it goes to support a school system that is not failing - even if it's not a public school system - maybe it's private, maybe it's parochial, maybe it's . . . whatever?

We have a clause that's called the separation of church and state.  Now parochial schools, by definition, are schools of religion.  So my position is real simple . . . no.  If it's a private school, they pay for it; that's why it's called `private'; they control who comes in and who goes out.  It's not open to the public.  If you have the resources, you can join.  Now charter schools, I think we can work it out.

Recently, there was an article in the Press about public schools and how they did on their last round of testing.  Charter schools did not demonstrate, and have not demonstrated historically, the same kind of numbers that we expect out of private schools.  There wasn't any great divergence.  But I think we can work with charter schools to make charter schools part of the system.  What we need to do is the same thing with making our communities better that we do with resource consolidation.

We need to sit the MEA down, sit the administrators down, sit the charter school leadership down, sit the private school leadership down, and say, "Look.  What is our purpose?  Our purpose is to educate kids to the best of our ability and make them competitive internationally, not just nationally or within this state.  Now we have these various disagreements; what do we agree on?"  And then we work down that list until we get to the disagreement items, and then we negotiate agreements that we can all live with and work within.

But we have to talk to each other, rather than calling each other names.  We have to get everybody on the same page and playing by the same rules for what's in the best interest of our students.  Not for what's in the best interest of our pockets, or for what's in the best interest of one group or another . . . it's about the kids.  We need to get there.

Here's another one though.  We'll go right back to the Detroit Public School system.  They're generally regarded as a complete failure.  Doesn't this essentially make the case for the viability of School Choice?

No.  What we need is to have a State Superintendent that has `teeth' sitting in the position that was designed for him to administer, and in many cases adjudicate, the school systems.  That's his job; he's the top dog; he manages these.  It's his responsibility to make sure that, if that board is failing, that he manages the laws in place for recall or to remove them and install people that can do the job.

But school choice wouldn't be a viable option here?

School choice is not a viable option, because we need to put people in charge of what we have.  We can't just walk away from it and say, "I wash my hands of it and I'm going to do this."  We have a system in place statewide.  And if we allow one failure, then the rest of them . . . the walls are all going to come tumbling down and create more failure.  We need to enforce from the top, and if you fix the big dog, you fix all of the problem.

But parents use school choice as a way to get their children out of failing schools.

We need to make it not a failing school; there are ways.  My disagreements with George Bush are on many different levels, but he instituted a good program.  The problem was that he didn't give us the money.  He mandated it without funding it.  If we give the program some teeth . . .

We're talking about `No Child Left Behind.'  Good program, unfunded.

Good program, not properly funded.  And that was because it was just a hodge-podge of ideas pulled together; one of those creative initiative things that wasn't really thought through.  The Republicans are good at doing that; they come up with some terrific ideas, but the problem is that they never finish them.  They're so worried about cutting taxes or cutting this or cutting that, rather than seeing it through to make it successful so it doesn't cost us money down the road.  Because money's cheaper today than it's going to be tomorrow.

Okay, we're going to move on, since we're talking about taxes, to Tax System Overhaul and Business Taxation.  According to Alan Greenspan, an effective tax reform does six things:

• Broadens the tax base and simultaneously lowers the general tax rate
  
• Taxes similar economic activity identically
  
• Is simple, easy to understand and comply with, and predictable
  
• Accounts for demographic changes
  
• Encourages savings and investment
  
• Enhances incentives for participation in the labor force

So do you agree that this - I'm talking about Greenspan's opinion now - is what a good tax system overhaul should do?

Well, I have to quantify that, and qualify the statement, by saying that's where ESTREP came from.  And yes, I agree that's exactly what an effective tax reform should do.

So, do you also agree that an effective tax system should effectively tax wealth and use that money to reduce taxes on worker paychecks and cover the tax burden on those living at or below the poverty line?

No, because I don't believe in taxing wealth.  Simply put, no; I can't agree with that, and I won't.

Fair enough.  The State of Ohio is in its second year of sweeping tax reforms.  The business tax compliance costs in Ohio have already dropped 63% from where they were back in 2005.  By the end of 2010, Ohio's corporate income tax will be completely eliminated, making it just one of two states in the nation without a general tax on corporate profits and without a general tax on tangible business personal property.  A State of Ohio publication recently released to Michigan businesses tells them that "by allowing companies to reduce costs and maximize profits, Ohio is becoming the ideal location for you (and your clients) to compete in the global economy."

Fifteen of my clients received that letter, and I've seen it and read it.  And my response to this is: eighteen months is not sufficient time to make a judgment call on the validity of that program.  I need to see history here.  I need to see this run out in good and poor economic times.  I am seeing a lot of greed take place in Ohio (I do have associations in Ohio).  I'm not saying their program is bad or good at this point; I just don't have enough history to make a call like you're asking me to.  I can't agree with it at this point.

On the other hand, in 2007 Michigan's state government responded in to a well-entrenched recession with the largest tax increase in Michigan history for the majority of our businesses.  We call it the Michigan Business Tax, though I'm pretty sure that Michigan business owners have different names for it.  Agree or disagree:  Would the Michigan FairTax, which would set all state-imposed business taxation to zero, be a good thing for the people of Michigan?

No.  The Michigan FairTax Proposal failed to receive the required number of signatures to appear on the November ballot.  The FairTax is a regressive tax, not progressive.  It would kill Michigan's economy.  That's simply my perception.  I'm going to have to pay a 9.75% sales tax on everything that I buy, even though I'm going to get this rebate.  We have something called general revenue sharing.  We've already seen the last four years of revenue sharing tanking and not being able to be done within our communities.  We've lost within West Michigan something like 14,000 public safety jobs.

But revenue sharing as it is right now, half of it's constitutionally guaranteed and half of it isn't.  The constitutionally guaranteed part is always paid, and the part that isn't usually isn't.  Now the Michigan FairTax constitutionally guarantees all revenue sharing.  In other words, the half that isn't getting paid right now will be.

That's what they claim.

But if you read the details on the back, that's what happens.

Let me point this out.  First, they didn't get it on the ballot this year.  Now they may try again in two years, and Fulton Sheen may have more success when he doesn't have to worry about being a Legislator, so he can devote more time to it.  Secondly, he couldn't sell it to the Legislature himself.  This tells me if the Legislature isn't interested, and is sitting back, then they couldn't support it.  If it was such a great program, the Legislature - and I'm talking about the House and the Senate - would put their arms around it and embrace it.  But this was not the case; it didn't happen.  So that tells me that 148 legislators couldn't come together to even get this onto the floor for discussion.  So that, added onto not being able to get the required number of signatures, makes it a non-issue at this point.

Now if Fulton Sheen wants to pursue that, then great guns go at it.  I appreciate and applaud his efforts.  On an economic basis, I don't believe that's the proper way or in Michigan's best interests.

So, since you believe that the Michigan FairTax is not a good idea . . .

I didn't say that I didn't think it wasn't a good idea.  I don't think it's the right idea.  Secondly, 148 legislators couldn't agree to bring it to the floor for debate, let alone they were not able to garner enough of the signatures required as a ballot initiative to get the citizen support behind it.  So to me at this point, it's a non-issue, and we shouldn't waste our time talking about a theory.

So, what will you propose and why will that work to lure business capital back to Michigan?

Thank you for asking.  The Abbasse Economic Stimulus, Tax Relief, and Education Program (ESTREP) is, very simply put, easy, simple, and does not require a lot of brains to do.  Right now the MBT debacle is strangling many businesses because they're having to spend exorbitant amounts of profit or non-profit just to figure out how to pay it.  How do you file the taxes?  Then we have the people in Lansing . . . the same issue falls under the SBT, it's the same argument.  It's complicated, convoluted, and difficult.  Now if you look on my website, you'll find that I have this entire history about the SBT and the MBT . . .

I'm really familiar with it.

So what we end up with is this.  We need to get rid of it, the MBT.  And my first goal is going to be to have my staff get me all the MCL and find out everything that's attached to the MBT, and prepare that for repeal.  And then I'll bring in, hopefully right away and with the support of 148 other legislators, a deal that I think is good and fair.  And the reason that ESTREP is good and fair is this:

ESTREP discriminates against no business.  Every business pays a one percent flat tax on their revenue generated.

That sounds like a gross receipts tax.

You can phrase it in that manner, but what we're talking about is gross revenue.  We're not talking about taxing assets, we're not talking about taxing the number of employees, and we're not talking about taxing health care.  We're not talking about taxing anything - including furniture . . .

So, get rid of everything except the revenue tax.

Right.  We're going to get rid of the property tax, and I'm only talking about business here.  This is the only way that we can make this equal, because all businesses do the same thing; they're there to create revenue.

So, get rid of everything but the revenue tax - on businesses.

My business tax is on generated revenue.  So if we're charging every business one percent of their revenue, they're all equal.  They can all plan their budgets out for next fifteen years, because they know that no matter what they do, they're going to pay one percent on their gross revenue.  Period; it's that simple.  They're all filing one percent.

Now there are a few caveats here; maybe three.  Food stores work on such a finite margin (one or two percent) that taxing them at one percent would break them; instead, they'll be taxed on a percentage of net.  Banks would not be charged except on new money, but not on re-fis or anything like that because that would strangle our chances of pulling out of this housing debacle that we're in.  Same thing on insurance companies; we want to tax them on new policies, not on renewals.

That's the fair thing to do.  Taxing on top of taxing on top of taxing has us where we're at right now.  So businesses are going to pay one percent, and here's how it works.  You have a form that says, "Total Gross Receipts."  You write that amount in.  Then the next line says, "Multiply Gross Receipts by One Percent."  And you write that amount in and remit it to the state.  Done; that's the form.

Do you know how much the state's going to garner from this program?  One percent of whatever the Gross State Product is.  Now what will that do for us?  First of all, it'll replace the MBT and provide what the original William Milliken SBT program was to provide for, three billion dollars per year on average.  I don't care how much you make in profit; I just want you to pay your fair share of the tax.  Because your business is using my tax money to pay for the infrastructure you use to do your business.  I don't care what business you're in, you need my infrastructure, and you have to pay for that.

I want to get rid of the Brownfield; I want to get rid of all that junk.  If we could get rid of all that stuff, we could quit giving all of these false credits to people and charge them specifically on their revenue that they're earning - which is what a tax is all about - then we have no discrimination, everybody's paying their fair share.

I know as a legislator that I can plan that as our state historically gains five or six percent every year in Gross State Product, our tax revenue is going to rise by that amount.  I can properly budget and appropriate and plan the state budget on time and be more accurate without having to go back and write legislation to cover shortfalls.  Now I know what I'm going to spend and what I've got to spend, so I can allocate properly.  At one percent we will move from 36th in the nation to 12th in one year (in terms of where we're positioned as a taxation state).  In our second year, my plan moves us to sixth.

We'd move ahead of Texas?

We'd move ahead of Texas, and we'd take all the business that Texas has taken from us and we'd bring it back.

Right now Texas is eighth lowest in overall state taxation.  They were sixth until this year, and the reason that it changed is that they really started taxing businesses.  (They're now 47th in the nation in business taxation, whereas prior to this year they were 12th.)  It seems to me that taxing businesses is a bad idea.

It seems to me that you're absolutely incorrect.

How so?

Because those businesses that have been receiving tax breaks have not been paying taxes anyway.  Let's put this in terms of General Motors on 36th Street, say 20, 15, 10 years ago.  The City of Wyoming, the County of Kent, and the State of Michigan granted an $11,000,000 credit to General Motors because they wanted to create more jobs, and they were bringing in new equipment.  Did small businesses get that tax break?  No; we're discriminating.

Okay, so your plan would eliminate all carve-outs then.

Exactly; businesses get to keep all of their money except one percent of their revenue; period.  And that's going to lower taxes to everybody in the state, because we're not going to have money added onto that product in additional taxes.

But, and this is where I go back to Alan Greenspan - although he's not the only one to say this, nor do I believe that he's the first - businesses don't pay taxes, people do.  The reason for him saying that is that businesses treat tax expenses just like any other expense; they stick it in the pile of bills to pay and run up their prices so they can cover the bill.  Now, that one percent gross revenue tax snowballs through the whole system.

That's what I just said; one percent.  

One percent; but it gets added on at every step in the supply chain.  So maybe at the refinery in Detroit - let's assume that they're using that - it's one percent tax on their gross revenue, because they do get revenue from the various distributors.  And the distributors have to pay that one percent plus their own one percent . . .

The refinery's paying one percent for the product that they're selling . . .

But he has to raise his prices to cover that one percent.  This means that the distributors are covering that one percent in the form of higher prices.

Not necessarily.  They're already paying a 22 percent surcharge.

Fair enough.  But the point is that that's going to snowball down the chain.  So the distributors and everyone else . . .

We're not comparing apples to apples here.  That's an unfair statement.  The issue here is; everybody is paying equally across the board.  Secondly, we're talking about a [current] tax system that has businesses and industries paying a 22 percent surcharge on top of a 4.95 percent tax.  Now to break that out, because of the discriminatory nature of it, not every business pays the surcharge because of loopholes.

Let's forget about that surcharge and just talk about the 4.95 percent.  My plan cuts that back to 1; I'm saving them 3.95 percent across the board.  Now you take a business like General Motors, and cut their taxes by 3.95 percent, that's a hell of a lot of money.  And I'm not giving them any more tax breaks; I don't have to deal with going to court or negotiations.  All I'm saying is it's gone; no more tax breaks for anybody; one percent and that's it.

So the tax break that brought the movie industry in - the 41 percent tax break - that would go away.

Yes; because they're only going to pay one percent.  They'll be paying less tax than they are with the 41 percent tax break.  North and South Dakota - one percent.  All the businesses do is write a check for one percent; that's it.  The state operates just fine.

There's also not a lot of population there, but I get your point.

Well I bring that up as a reference that this isn't something new.  There's some track record . . .

What about the rest of our state's tax system?  You're only addressing the business taxes.

Well, that's all we were talking about.  I think my plan is pretty straightforward.  It's going to save businesses a 22 percent surcharge and 3.95 percent across the board on their taxes.  It's level and every business is being treated fairly; no more discrimination.  It's simple, it's straightforward, and the total business tax relief on this thing is about 10 percent on businesses across the board.

Now the other thing that we're gaining, the big three are only being taxed on the business that they do in Michigan.  They're not being taxed on business that they do out of state.  In the case of Ford, they do about 3.7 percent of their business in the State of Michigan.  General Motors does about 3.9.  Chrysler is about 2.4.  They're taxed based on the amount of business that they do in the state.  They're not paying tax for being here, for having their headquarters in Michigan and being a Michigan-based corporation, only on the amount of money that they earn here.

The State of Michigan lost hundreds of millions of dollars in this deal.  That's why I opposed it from the beginning, because it was not good, it was expensive, and it's not just.  And that's where I'll leave it.

Right now we've only talked about business taxes.  What about the rest of the tax system?

Again, taxes are very important.  Taxes pay for the infrastructure and services that we as citizens demand.  So I don't oppose taxes.  I believe in fair taxation and what we, as citizens, need to live.  And I believe in infrastructure, because if we don't reinvest in our infrastructure, it's going to crumble, and we're seeing that happen.

I agree that that's pretty much the entire purpose of a tax system.

I know as an economist that a 4.3 percent state income tax puts us in pretty good shape; we can meet our obligations under that.  However, I know that under my business tax program we're going to generate 3.5 to 4 billion dollars in state revenue.  And that's what was originally designed.  Now that takes care of education needs, infrastructure, about half of our allocated budget.  So in effect, under that one percent program, I can reduce our income taxes to 3.5 percent (maybe 3.4 percent) and provide the associated breaks to . . .

So let's go to what I believe is a critical flaw in an income-based tax system.  And this is right out of the State Treasury numbers.  We have about a 20 percent non-compliance rate - and that's an estimate.  Because income tax assumes - erroneously as you and I both know - that people are reporting their income accurately.  But we have all manner of criminal enterprises, prostitutes, drug dealers, illegal immigrants . . . the whole shooting match.  There's a twenty percent non-compliance rate for a reason.  Wouldn't it be wiser to move to a system that has been known and proven to have a 98 percent compliance rate (which means only a 2 percent non-compliance rate)?

I can understand that non-compliance rate, but no.  The FairTax is convoluted, it's regressive, and it requires a whole new layer . . . you're replacing the income tax collection department with the compliance program to make sure that all of these prebate checks go out accordingly, and are properly re-credited, and that everybody is staying within these defined qualifying income for the prebate . . .

But the prebate doesn't depend upon people's incomes, it depends upon (1) whether or not they're legal adult residents of the State of Michigan, and . . .

What does a legal citizen of Michigan mean?

Someone who's a resident of the state as far as I know.  Your driver's license says you live here . . .

Is a resident alien a legal resident?

As far as I know, a legal resident alien is legal resident.

Is an illegal alien a resident of this state?

Not as far as I know.  An illegal alien isn't a legal resident of the state, and that's the critical problem.  You have to be a legal adult resident of the State of Michigan to qualify for the prebate check.

What about an illegal alien that's working as a migrant farm worker?  That farmer wants that worker because they know what they're doing.  I could take a hundred people, prisoners or people on unemployment lines, and take them up there and tell them to pick fruit, and they're going to have no clue what they're doing.  But this illegal immigrant knows exactly what to do and what to look for, and is going to do the job right the first time.

Now that person is only coming here because he can make money and earn a living.  And if we can tax him . . . this goes back to what I said earlier.  We have laws in place for illegal immigrants, but we can provide work visas to people from other countries.  We need to properly fund the immigration department so they can manage the process.  But when we let these people come in on work visas, we're going to be able to tax them.  But they have no right other than to work here and pay their taxes; they don't have the right to take it back.  Now they can file a tax return form as a resident alien on a work visa, I don't have a problem with that, and what they've overpaid they can have back.

But if they're here on a work visa, then they're a legal resident of the state for as long as the visa's . . .

No, it doesn't make them legal.  It's allowing a person to come and earn money in this state . . .

But that makes them a legal resident for the duration of the visa, doesn't it?

That's incorrect.  It does not make them a legal resident.  What that is providing for them is the ability to come here and work for a specified period of time, having to pay the same taxes . . .

But they're legally in the State of Michigan . . .

We are allowing them to be in the state legally.

So they would qualify then, since they're adults on a work visa.

No, they don't qualify.  It's in the legislation.  It's how you write the legislation that makes them legal.  My position is, what I'm doing is, allowing them to come into the state under a work visa - and this is a national thing, I don't think that it's even something that we do at the state level - but if we allow them to come in and pay state taxes, if they then have to leave the country, then we need to be able to track these people as they come in and move around in and go out of the country.

But we're not on an immigration issue at the moment . . .

I'm not talking about that; I'm talking about people coming into this state to work, that I can tax and put their money into our general revenue fund.

But I was also talking about the prebate.  Because if they're here legally on a work visa, as long as that work visa's valid they are, for the purposes of the prebate, legally a resident of the State of Michigan, so they would get that prebate.

Are they going to pay taxes?

They'll buy stuff, won't they?

No . . .

. . . we're back onto the concept of the FairTax.  They buy stuff, don't they?

As I mentioned earlier, I don't even want to go there.  It's a non-issue.

Do they buy stuff with the money they earn?

Of course.

Well, then, they would be paying sales tax, would they not?

Yes.

Well there you go then.

But they don't get it back.  Nobody will give them the prebate . . . It's a non-issue.  It's not before the Legislature, it didn't make it onto the ballot, it's not going anywhere.

But if you start getting calls and letters and e-mails to your office, and your constituents start getting on your tail about this, then you might think about it.

If my constituents say to me, "Al, we need to look into this, we need to hold hearings on this matter."  I will do whatever those constituents tell me, whether I agree or don't agree, to the very best of my ability.  I will do whatever my constituency asks of me or directs me to do, because they're the boss.

If they look as the ESTREP plan and say, "Good idea, but we can go one better.  Let's do the FairTax instead."  If you start getting enough of those letters, and phone calls, and e-mails, then you'll look into the FairTax a little bit deeper.

I will do more than look into it; I will do what they have asked me to do with all the intensity that I have at my disposal.

And if they tell you to bring it onto the floor . . .

I'll bring it onto the floor.

. . . and get a super-majority vote put together in the House because they want to see this on the ballot . . .

Then that's what my constituency demands . . . I want you to remember, I am a servant of my constituency.  It is not "The Al Abbasse Show"; it's not about me.  It's the 72nd District, and then it's Kent County, because I'm elected to represent them.  In fact, really, it's about other districts as well.  My first obligation is to every citizen in this state.

I look at it - and I teach this in my classroom - if I'm elected to the 72nd, and someone calls me from Kevin Green's district or some other district, it's my obligation to listen.  And then, first of all, I'm going to talk to that legislator and tell him or her that I've been getting contacted and that he or she needs to look into the issue.  And if they choose to ignore it, then it's my job to bring it up.

So let's take that one and move to Employment, Job Losses, and Right to Work.  In your platform - and again this is the one available online - you state that employment in this state is not as perilous as many want us to believe.  Right now, Michigan's unemployment rate is at 8.5% for the third month in a row (approximately 1 out of every 12 workers without a job); the worst in the country except for Puerto Rico.  And according to United Van Lines' annual migration survey, we have lead the nation for two years running in outbound migration (about 67% outbound).

Same thing with U-Haul.  U-Haul is hiring people, because so many of their trucks are leaving Michigan, to drive those trucks back here.

And you said that unemployment in this state is not as perilous as many want to believe.  Are you sure you want to stick to that position?

Yes; because under my tax program - which I will immediately start to put through - once companies start to see that we're tax-friendly and we're going to offer them a lower tax rate than can get just about anywhere (which will allow them a 9% to 12% increase in their profits), they'll be able to bring their businesses back to our state and create new jobs.

Secondly, we have the opportunity here to grow Michigan.  We can't cut our way out of this problem.  We have to get a growth opportunity and grow the state.  We grow the state by reducing our tax burden across the board, and that's what I'm offering.  My plan specifically meets and addresses every statement made by Alan Greenspan, because that's where it came from.  It's Keynesian theory.

The second part of that program is that, in order to employ people, I've got to get businesses moving.  I'm going to put a lot of efforts into bringing environmental businesses back into the 72nd District, because this is the tooling capitol of the world right here in West Michigan.

So we're talking about Green Collar industries.

We want to go after every one of those industries.  We want to create the tooling opportunities to manufacture wind turbines and solar panels.  I want to create legislation that allows us to get back to government-private joint ventures.  I want to make that `miracle mile' the `miracle 120 miles' from here to Detroit.  I want to have a public transportation system, a rail system, connecting Grand Rapids to Detroit, so that people can get between the two (and Lansing and Ann Arbor) quickly, efficiently, and cleanly via train.

Now I also want to incorporate that into our community so that we can have the opportunity for rental vehicles, bicycles, and public transportation.  If we can get people using that, we're going to cut down on our auto emissions, which creates jobs throughout the entire state; because we're going to have trains running, we're going to have people commuting.  It's going to create new businesses along that route, which will want to be near the rail stops.  I want to put rail cars on the back of the trains so that, rather than having to rent a car, people can take their cars with them without burning fuel.  That's going to create more jobs.

The other part of that job creation is this:  I would like to see a state-private venture that has us putting solar panels across the top of every large building that we can get them on.  We have to have people build them - jobs - and maintain them - jobs - and now we're powering our electrical grid without costing anything except for infrastructure.

And getting back to the original question, which is our current state unemployment situation - and I'd like to see that implemented, because it sounds great - but right now our job market is in the tank.  It's not a good tank to be in.

It's not.  I'm sitting here as an unelected official, as a candidate, and I can't jump into the fray and start holding the proper hearings . . .

So what you're saying is that you agree that it's very dangerous right now . . .

What I'm saying is that it's not as bad as we're being told - it could get worse, but it doesn't have to.  Just like I said before, the Michigan Business Tax system is not the right thing; it may have been 15 or 20 years ago, but it's not the right thing for us at this time.  The right thing to do is to level the playing field, to make sure that we have no more business discrimination in taxation, make sure everyone pays the absolute minimum (and I think one percent is the absolute minimum).

One percent is lower than the initiative that we spoke about earlier.  I think every business is obligated to pay taxes, and that one percent is . . . every business wins.  You have to talk about win/win situations without creating more economies of scale, which in this case is an economy of debt because we have to create another level of bureaucracy.  I'm reducing that level of bureaucracy; I'm removing that business tax auditing department in the State of Michigan (which costs the state $52 million per year).

We're going to take those people, and we're going to put them to work at other jobs that help generate more revenue, or provide the protections to the children that we talked about earlier (so we can have more people auditing the process to make sure that our children are taken care of), or out in the schools auditing the school systems the way that it should be happening.  We're going to take advantage of the fact that these people are auditors.  We want them auditing everything possible to make sure that tax dollars aren't being wasted.

So we're going to have all these extra state employees that won't have jobs, and we're going to stick them in auditing jobs . . .

Put them in compliance enforcement positions.

Now in your platform you state that you intend to propose legislation to require any company that has received tax credits or taken advantage of Free Enterprise Renaissance Centers, and chooses to leave the community or state, must repatriate the state and community all credits - with tax and penalties - before they leave.  Is that only while the credits and abatements are in effect, or does that also include after they expire?

When that was written, that was in response to four companies that had previously received abatements that, when the abatements expired, left.  As soon as they ran the abatement out, they packed up and left.  Now I think that the fair thing here is that if a business has been granted . . . let's take MPI Research Partners in Kalamazoo as an example; ten year abatement, they pack up and leave in year eleven, I don't think that's fair.  They took unfair advantage of the community and the state to receive favored status, and they're not going to live up to their obligation to be a good corporate citizen of the State of Michigan.

But doesn't that obligation only cover the abatement period?  I don't know that it covers any post-abatement time.

I would say that, under my program, we're only going to charge them one percent tax and they're not going to want to leave.  Secondly, there is no issue of an abatement anymore, because nobody'll get them.  Now, should that not succeed, I just personally believe that if we give abatements to companies, and they leave within three years of the expiration of that abatement, they should be responsible to at least repatriate the credits.

So it seems like what you're saying is that they have to stick around - let's assume the current Michigan Business Tax and MPI Research Partners - we give MPI a ten-year abatement, and they do their ten years, they have to feed a monster for three years before they're allowed to leave.

I'm not saying they're feeding a monster because we just gave them a ten-year abatement, and how much of that monster did they get to keep in their pocket or in their profits.  So that's an unfair statement, or an unfair way to phrase it.  They're paying their fair share under Michigan law, and they have every right - every single right - to come to my office and say, "This is unfair; what can you do to help me?"  And I'll do everything in my power to help them, because I want every business to stay in Michigan.  I don't want any businesses to leave; we have to grow Michigan.  That's it.

We can't cut our way out of this, we can't cut taxes, we can't give free taxes to anybody, and we can't create more layers of bureaucracy and waste dollars.  We need every dollar that we can get going into our general revenue fund so that we can pay for the services and infrastructure that we need to go out and bring more businesses back to Michigan and create more jobs.  That is our first priority is to create more jobs, and the only way to create more jobs is through fair business taxation that is equal, non-discriminatory to every business and every person.

Do I have all the answers on this?  No.  Do I have ideas?  Yes.  Do I have a plan that I think meets the six criteria of fair taxation as laid out by one of the greatest economic minds of the century?  Yes.  So I think I'd have his support on this, because I meet those requirements.

I'd like to see Alan Greenspan's endorsement on your tax plan.

If he wasn't so doggone busy playing tennis, I'd try to get it.

Here's the thing then.  Again, assuming that you don't get ESTREP in place, a company that knows coming in that they have to pay Michigan business taxes for three years past the abatement end . . . why would they want to come in here in the first place?

To get the abatement - ten years, to continue our example - to begin with.  Because that's those years of net income that they're not paying taxes on.  And when you average three years of normal taxation into ten years of no taxation, you end up with a net of one year of normal taxation for the entire period.  That's a lot of hypotheticals, and I'd rather stay focused on the ESTREP plan or on the MBT.

Next question.  Right now we're not losing jobs overseas so much as we're losing them just out of state.  As an example, recently Volkswagen - at the vote of their employees - put their brand new plant in Chattanooga, Tennessee.  Ford's F-150 truck plant is in Norfolk, Virginia.  GM's Saturn plant is in Tennessee - Knoxville, I think.  We're not losing businesses overseas, we're losing businesses state to state.

We're losing businesses overseas and we're losing some businesses right here in the nation - that's the proper way to phrase that question.

But what about cross-state business losses; what are we doing to bring them back?  What would you propose to bring them back?

Again, I propose my ESTREP package, because my taxation system is better than theirs.  Our taxes are lower than Tennessee.  But the only way we're going to bring businesses back is with a fair business tax system.  You can't commingle the personal and business taxes at this point, because I don't have a personal tax position other than that I think my business tax plan will allow us to reduce the state personal tax rate to 3.4 percent.

So if you take ESTREP and you put it in place, and then you'd also reduce the state personal income tax to 3.4 percent . . .

I think we can do it.  I really think that we can do it through a whole system . . . and not just cutting taxes, we have to make some strategic cuts.  For example, do you know how many committees there are in the State of Michigan?

I have no clue, and I think it's more than I care to count.

Do you know that the Governor doesn't know; that the leadership of the House and the Senate do not know; that there isn't anybody that knows?

But we're not talking about legislative committees, are we.

No.  We're talking about government committees; licensing boards.  We have all of these appointments that the Governor makes to all of these different boards.  I personally believe that the number is in the middle-400 range.  What do we have these for?  Get rid of them.  We're paying people to hold meetings that aren't productive and don't do anything.  These are extraneous and they're expensive; they cost us money.  Get rid of that stuff.

My point is: we have to take a serious look - and we need someone of my expertise, that has the auditing know-how - that can say, "Who are the best people to come in here?  Who can we get to take a look at this stuff and report back to us to eliminate these extraneous expenses that we don't need?"

So we need to cut - and I agree wholeheartedly with cutting taxes - we need to cut the extraneous waste of money in our government; which we're not doing.

So in addition to cutting taxes, we need to get rid of unnecessary spending as well.

Right.  And through a combination of that, with the program that we're going to use to lure businesses back into Michigan to create more jobs . . . because the more jobs we create, the more people we'll have paying taxes.  We're not taxing more; we'll be collecting taxes from the people working.  That 8.5 percent, we'll be getting them back into the workforce and paying taxes.  Now our revenue is also going to rise.  So with that rise in revenue, we can bring that whole tax to everybody down, and also strategically eliminate wasted money.  It comes down to simply saying that if we don't need it, get rid of it.  Just like cleaning out the garage.

So let's take this back to the topic of Employment, Job Losses, and Right to Work.  You mentioned Right to Work in your platform, but the definition doesn't match what I'm familiar with out of Right to Work.  And I'm saying this because this stack of paper that I have here is the Right to Work laws of all 23 states and territories.  And I can summarize them in a sentence:  Union membership cannot be legally required nor prohibited.  That's it; union membership is a total option - join or don't join, it's totally up to you.

No.

Why not?

Because the legislation that has been submitted to the Michigan House HB 5771 and HB 5772 expressly state that the Michigan Wage and Hour Laws will be repealed upon successful adoption and implementation.  Secondly, by the elimination of Michigan Wage and Hour Laws as written will repeal all of the associated health and safety matters and all of the express rights . . . because 5771 states that you cannot actively pursue union activities or union collections.

Now I believe that if people want to unionize, that's the right of the people, because the Constitution gives them the right to peacefully assemble.  It doesn't tell us what they have the right to peacefully assemble about, just that they have the right to peacefully assemble.  Now if they choose to assemble and form a union, by vote, then they've formed a fair association under the Constitution that gives them the right to bargain collectively with an employer, through representation, if they don't feel that they're being treated fairly.

This is the same thing that businesses do when they sign on with their local Chamber of Commerce to get representation in front of the government.  I think that the people that are working for employers have the same right.

Here's the thing, though.  In Michigan currently Chamber of Commerce membership is optional, but union membership is not.  Michigan's laws right now force union membership.  In other words, a line worker who puts in his probationary time now has to choose between (1) becoming a dues-paying member of a union he may not want to join and (2) joining that 8.5% unemployment rate.  That seems wrong.  Now maybe the Right to Work legislation currently sitting before the state doesn't reflect that . . .

But that's all I can address.  I can't address anything else.

I'm asking on the general concept, not on the legislation before the House.  The general concept is: Why should I have to join a union if I don't want to?

Well, those states have not demonstrated that they are better at anything to do with the labor position.  Those states provide less healthcare benefits; their workers earn, on average, fifteen to twenty percent less; the workers in those states also do not enjoy the same privileges of work safety.

That's not necessarily so.